Iran could earn $60bn a year from Strait of Hormuz tariffs, economist says

Iran could earn up to $60bn annually by levying transit tariffs on energy and goods passing through the Strait of Hormuz, an Iranian economist has said, as data shows Tehran is already reaping a wartime oil windfall as the only major Gulf exporter still moving crude freely through the waterway.

Hossein Raghfar, a university professor and economic analyst, told Tasnim News Agency on March 30 that Iran's armed forces had secured a strategic and economic advantage by controlling the strait that few had anticipated before the war began.

"Today the position of the sanctioner and the sanctioned has been reversed. A very powerful tool is now in the hands of our country, and that is control of the Strait of Hormuz," Raghfar said.

The scale of Iran's current oil earnings underlines the point. Iran is estimated to be generating around $139mn per day from sales of its flagship Iranian Light crude in March, up from approximately $115mn per day in February, according to Tankertrackers.com export data.

Exports have remained close to pre-war levels of around 1.6mn barrels per day, with tankers continuing to load at Kharg Island and transit the strait while other Gulf producers face severe disruption.

Iran's crude is also commanding significantly better prices. The discount of Iranian Light to Brent has narrowed from over $10 per barrel before the war to just $2.10 per barrel, while Brent itself has surged above $100 per barrel and reached $126 per barrel at its peak.

Iran is also charging transit fees of up to $2mn on some commercial ships crossing the strait, adding another revenue stream.

Raghfar said Iran could formalise this further by levying transit tariffs on all vessels passing through the Persian Gulf, potentially generating $60bn a year.

"Based on some estimates, Iran can earn at least around $60bn annually from tariffs on the entry and exit of energy and goods from the Persian Gulf, income that until now has been practically overlooked," he said.

He dismissed suggestions the strait could easily be reopened by force, and said oil prices could reach $150 per barrel if the current situation continued. The closure has already been described by the International Energy Agency as the greatest global energy security challenge in history, with around 20mn barrels of oil per day normally transiting the waterway.

Raghfar said Iran should treat the wartime conditions as an opportunity to fundamentally review its economic policies, and added that the expulsion of US military bases from the region could emerge as a further strategic outcome from Tehran's perspective.